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You Ning Sun (Co-CEO and CFO of Endowus) had a fireside chat with Mr Loo Cheng Chuan as they discussed strategies around unlocking $4 million (4M65) in your CPF. In this session, they will chat about how investing efficiently yields better returns for your personal wealth, investment restrictions and the different options available in the market.
2:38 Loo's introduction
16:12 How much would our CPF worth be at 65 years old?
18:06 How can we get 7% through CPFIS?
19:51 What if we invest all our OA into the S&P500?
26:11 What is needed for a couple to achieve 4M65?
28:10 What is holding everyone back to become a CPF Millionaire?
30:42 QnA Part 1
59:20 You Ning's introduction and an introduction to Endowus
1:03:14 Indexing strategy VS individual stock selection
1:04:40 Compound interest - starting as early as possible
1:06:12 Marketing timing
1:09:38 Diversification
1:13:17 Loo's thoughts on investing through CPF for S&P500
Extracted QnA
Q: Would you do a SA top-up or invest in S&P500 - 4% or stock market return?
A: Investors shouldn't look at returns alone, but consider risks as well. A 4-5% return on SA is not high compared to 7% on S&P500, but the risk is near 0. If you are willing to take some risk, use your Ordinary Account. I would be more willing to invest in S&P500 using my Ordinary Account.
Q: What advice would you give to those who are in their 50s and older?
A: Now that people at 70, 80 years old are very active, our time horizon for money must be stretched after 65. In short, my personal view is that even at 65, we shouldn't be in a rush to take money out. Let the interest compound. Even at 45 or 55 years old, we can still harness the power of compounding. We should also educate our children to have this mindset when they are young.
Q: What you should look at for holistic financial planning?
A: Holistic financial planning should follow these steps: first, set aside money for a stormy (not just rainy) day. 6 to 9 months of emergency funds should be set aside for mortgages and family expenses. After that, we have to make sure that you have got your insurance. I highly favor term insurance because it gets you the most value for money. After that, look at your financial safety net of 1M65, top up as much as possible into your SA. Once these are set up, you can use the rest of your cash to invest in more risky investments - stocks, shares, property.
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Investment involves risk. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Past performance is not an indicator nor a guarantee of future performance. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endow.us Pte. Ltd (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus Pte. Ltd., its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.
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